Uwharrie Capital Corp.

19/08/2024 | Press release | Distributed by Public on 19/08/2024 15:41

Business/Financial Results Form 8 K

August 19, 2024

Dear Shareholder:

We are pleased to report on the continued growth and development of Uwharrie Capital Corp and its subsidiaries. As of June 30, 2024, our total assets reached $1.1 billion, reflecting an 8.6% growth from June 30, 2023. Our total annualized return on equity improved to 17.6% as of June 30, 2024, up from 16.9% the previous year. Net income available to common shareholders for the six months ending June 30, 2024, was $4.3 million or $0.61 per share, a $419,000 increase over the $3.9 million or $0.54 per share reported for the same period in 2023.

Loan demand remains strong across all sectors of our lending portfolio and markets. Loans grew nearly 20% from June 30, 2023, to June 30, 2024, increasing our loan-to-deposit ratio to 62.5%. This growth has been achieved without compromising our credit standards; our underwriting and lending policies remain as thorough as ever. Our asset quality strength is evident in our low levels of past dues and non-accrual loans.

We continue to grow our core deposit base, allowing us to maintain our cost of funds expense and improve our net interest margin as a percentage of average assets to 3.40%. This is particularly notable as many of our peers are experiencing flat or declining net interest margins. Net interest margin remains the largest contributor to our net income. Other non-interest income sources, such as card services and wealth management, also continue to grow and diversify our earnings base.

New endeavors for our company include relocating our Mount Pleasant branch (Cabarrus County) to a more visible and accessible spot on Hwy 73. The new location, in the heart of Mount Pleasant, promises greater convenience for our customers. While we finalize the plans, we invite you to stay tuned for updates on our innovative, non-traditional branch design.

We are also excited to announce our partnership with Greenlight. This alliance allows us to offer a Uwharrie Bank-branded Greenlight app with a Greenlight Debit Card to families at no cost. Greenlight is a comprehensive money app for families, enabling kids to earn money through chores, set savings goals, and spend wisely. Parents have flexible control over limits and spending locations, receiving real-time notifications of their children's transactions. The app also includes features for setting up different ways for children to earn money, such as completing chores or engaging in gamified learning activities that teach age-appropriate financial lessons. We believe this partnership aligns perfectly with our core values of promoting financial literacy and introduces us to a new generation of customers. To learn more or to sign up for your family, please visit www.Uwharrie.com/Greenlight.

We are halfway through our 40th anniversary celebrations and have enjoyed celebrating our past and building on our future. We invite you to join us at your local branch and follow our journey on social media. We encourage you to keep referring your family and friends to join us as customers and shareholders. Together, we can build upon our 40 years of success and continue to thrive in the future. Your support is invaluable to us as we stay dedicated to making a meaningful impact-delivering a strong return on your investment while enhancing your communities.

Thank you for your continued trust and support.

Sincerely,

UWHARRIE CAPITAL CORP

/s/ Roger L. Dick

President and Chief Executive Officer

This Report may contain, among other things, certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including, without limitation, (i) statements regarding certain of the Company's goals and expectations with respect to earnings, income per share, revenue, expenses and the growth rate in such items, as well as other measures of economic performance, including statements relating to estimates of credit quality trends, and (ii) statements preceded by, followed by or that include the words "may," "could," "should," "would," "believe," "anticipate," "estimate," "expect," "intend," "plan," "projects," "outlook," or similar expressions. These statements are based upon the current belief and expectations of the Company's management and are subject to significant risks and uncertainties that are subject to change based on various factors (many of which are beyond the Company's control).

Uwharrie Capital Corp and Subsidiaries

Consolidated Balance Sheets (Unaudited)

June 30,

June 30,

(Amounts in thousands except share and per share data)

2024

2023

Assets

Cash and due from banks

$

11,195

$

10,608

Interest-earning deposits with banks

46,276

83,245

Securities available for sale

350,764

324,484

Securities held to maturity (fair value $24,656 and $25,812, respectively)

27,252

29,191

Less: allowance for credit losses on securities held to maturity

(66

)

(65

)

Equity securities, at fair value

324

303

Loans held for sale

3,611

3,297

Loans held for investment

636,738

534,364

Less: allowance for credit losses on loans

(5,908

)

(4,713

)

Net loans held for investment

630,830

529,651

Premises and equipment, net

14,552

15,206

Interest receivable

4,688

3,712

Restricted stock

1,709

1,468

Bank-owned life insurance

7,864

7,721

Deferred income tax benefit

9,056

10,593

Loan servicing assets

4,089

4,615

Other assets

11,116

9,934

Total assets

$

1,123,260

$

1,033,963

Liabilities

Deposits:

Demand, noninterest-bearing

$

286,517

$

277,685

Interest checking and money market accounts

391,245

426,997

Savings accounts

95,208

98,118

Time deposits, $250,000 and over

128,162

55,873

Other time deposits

122,943

91,597

Total deposits

1,024,075

950,270

Short-term borrowed funds

6,400

932

Long-term debt

29,123

29,066

Other liabilities

11,530

12,135

Total liabilities

1,071,128

992,403

Shareholders' Equity

Common stock, $1.25 par value: 20,000,000 shares authorized;

issued and outstanding or in process of issuance

7,068,577 and 7,057,847, respectively.

Book value per share $5.87 in 2024 and $4.29 in 2023 (1)

8,836

8,823

Additional paid-in capital

12,510

12,521

Undivided profits

46,419

39,012

Accumulated other comprehensive loss

(26,288

)

(29,451

)

Total Uwharrie Capital Corp shareholders' equity

41,477

30,905

Noncontrolling interest

10,655

10,655

Total shareholders' equity

52,132

41,560

Total liabilities and shareholders' equity

$

1,123,260

$

1,033,963

(1) Net income per share, book value per share and weighted average shares
outstanding have been adjusted to reflect the 2.0% stock dividend in 2023.

Uwharrie Capital Corp and Subsidiaries

Consolidated Statements of Income (Unaudited)

Three Months Ended

Six Months Ended

June 30,

June 30,

(Amounts in thousands except share and per share data)

2024

2023

2024

2023

Interest Income

Interest and fees on loans

$

9,285

$

6,989

$

18,079

$

13,356

Interest on investment securities

3,326

2,951

6,564

5,818

Interest-earning deposits with banks and federal funds sold

710

1,181

1,336

2,251

Total interest income

13,321

11,121

25,979

21,425

Interest Expense

Interest paid on deposits

4,097

2,712

7,826

4,828

Interest paid on borrowed funds

408

342

799

685

Total interest expense

4,505

3,054

8,625

5,513

Net Interest Income

8,816

8,067

17,354

15,912

Provision for credit losses

431

109

401

386

Net interest income after provision for credit losses

8,385

7,958

16,953

15,526

Noninterest Income

Service charges on deposit accounts

267

264

535

513

Interchange and card transaction fees

322

315

610

619

Other service fees and commissions

897

822

1,828

1,711

Gain (loss) on sale of securities

-

9

(148

)

(42

)

Realized/unrealized gain (loss) on equity securities

(19

)

(23

)

22

11

Income from mortgage banking

606

891

1,440

1,585

Other income

153

408

268

271

Total noninterest income

2,226

2,686

4,555

4,668

Noninterest Expense

Salaries and employee benefits

5,145

4,932

10,359

9,676

Occupancy expense

429

432

854

885

Equipment expense

218

195

425

383

Data processing

203

204

433

408

Loan costs

51

98

84

198

Professional fees and services

262

179

526

437

Marketing and donations

339

342

705

724

Software amortization and maintenance

329

296

659

603

Other operating expenses

856

1,164

1,669

1,653

Total noninterest expense

7,832

7,842

15,714

14,967

Income before income taxes

2,779

2,802

5,794

5,227

Provision for income taxes

566

579

1,198

1,050

Net Income

$

2,213

$

2,223

$

4,596

$

4,177

Consolidated net income

$

2,213

$

2,223

$

4,596

$

4,177

Less: net income attributable to noncontrolling interest

(141

)

(141

)

(282

)

(280

)

Net income attributable to Uwharrie Capital Corp and common shareholders

$

2,072

$

2,082

$

4,314

$

3,897

Net Income Per Common Share (1)

Basic

$

0.29

$

0.29

$

0.61

$

0.54

Assuming dilution

$

0.29

$

0.29

$

0.61

$

0.54

Weighted Average Common Shares Outstanding (1)

Basic

7,093,666

7,215,163

7,108,070

7,215,891

Assuming dilution

7,093,666

7,215,163

7,108,070

7,215,891